Business Council calls for spending cuts and tax reform in budget submission

Updated
Tue 25 Feb 2014, 12:18 PM AEDT

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The BCA says reduced red tape will enhance growth.

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The lobby group for Australia's largest corporations is calling for a budget that makes difficult decisions to return the budget to surplus within the next decade.

In its submission on the upcoming Commonwealth budget, the Business Council of Australia says there will need to be a combination of spending cuts, strengthening the tax base so it raises enough revenue, and structural reforms to workplace laws, welfare and reducing red tape to encourage job creation and participation in the workforce.

However, the BCA's chief executive Jennifer Westacott says it is probably not a good idea to have too many of the tough decisions taking effect this year.

"I'm not sure that it needs to be really, really tough in one year, but it does have to set a tough of decisions over the medium term," she tells business editor Peter Ryan in an interview to air on Tuesday's AM program.

"It has to set out the structural reform that will involve some tough choices that government has to go down so that we can get our fiscal position under control."

Ms Westacott says addressing the issue of middle class welfare should be a priority.

"We ought to be willing to have a conversation about the eligibility age for the age pension, we need to look at the whole issue of welfare and say can we sustain welfare being diluted across many people and many income brackets versus targeting to those in most need."

Beyond the budget, the BCA is also arguing for significant industrial relations changes to allow employer-only enterprise agreements on greenfield sites, and an expansion of the range of things that can be bargained over in agreements.

"We've argued for a long time that companies ought to have the flexibility to use labour hire firms and contractors and that those would be sensible reforms," Ms Westacott said.

She also says that entitlements such as penalty rates, overtime and leave loadings will need to be reviewed in the future.

"Over time those need to be looked at, but that's really the job of the Productivity Commission review," Ms Westacott added.